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The Roemer Report On-Line, May 2005

NO RELIEF IN SIGHT: With diesel fuel prices at record highs, the economic recovery suddenly seems a little softer. Diesel prices are about 35 percent higher now than they were a year ago at this time and already 13 percent ahead of where they were in early February. For truckers, the skyrocketing fuel prices have added $572 million to their fuel bills for the month of February alone, and some car¬riers say they are past their “absorption point.” While truckers are using their traditional safeguards against high fuel prices—shopping the market, reducing idling time, using route optimization programs—they're still not keeping up. Ira Rosenfeld of Overnite Transportation says, “We shop the market every morning, checking the price in particular areas. We have reduced the idling time of our trucks, we're doing anything we can to save on fuel consumption. But the fact is, the prices out there are higher than they have been.” Some truckers say they are starting to feel the strain in other ways, as customers opt for cheaper rail transport or choose smaller truckers who may be more flexible on pricing. Unfortunately, there is no relief expected anytime soon. The government just released its short-term energy outlook and predicted that diesel fuel prices will average $2.24 per gallon from now through September.

BUCKLE UP FOR SAFETY: At the Mid-America Trucking Show last month in Louisville, Kentucky, DOT Secretary Norman Mineta urged truck drivers to fasten their seatbelts every time they get behind the wheel. Mineta said that 80 percent of U.S. motorists wear seatbelts, but only half of commercial truckers do. Of the 620 truck drivers killed in 2003, half were unbuckled, said Mineta. And of the 171 ejected from their cabs, more than 80 percent did not have on their seatbelts. “Far too many truck drivers take it on faith that the size and weight of their rigs will protect them and that if they are a really good driver, they don't need to wear a belt,” he said. “But driving unbuckled is like playing Russian roulette—you are tempting fate, because you never know when the loaded chamber will come around.” Another panelist suggested that better truck driver training could have a positive impact on seatbelt usage. FMCSA Administrator Annette Sandberg noted that the government is implementing other initiatives to improve truckers' safety. To a huge round of applause, she described a pilot program in Washington state in which passenger-car drivers are targeted for safety. The idea is to place a trooper in the truck cab to identify car drivers that cut off truckers. The trooper in the truck then calls ahead to other officers who pull over the offending car driver for a citation.

HOS CAUSING FATIGUE? While the hours-of-service regulations were imple¬mented to ensure commercial drivers had adequate sleep, one study finds that drivers are drowsier today than they were under the old rules. The survey, conducted by the Insurance Institute for Highway Safety (IIHS), found that one in four driv¬ers said they drive more than the daily limit of 11 hours. Eight out of 10 drivers said they drive 25 percent more per week, thanks to the “restart” provision in the new rules. “While the drivers said their sleep time has increased under the new rule, they reported slightly more instances than the previous year (under the old rules) of driving drowsy or falling asleep at the wheel,” the IIHS said. When drivers were asked about dozing at the wheel, 13 percent said it was a problem in 2003, under the old rule, and 15 percent admitted it was a problem in 2004, under the new rule. The explanation for the discrepancy, according to IIHS vice president for research, is that “truckers are using the restart provision to squeeze even more driving hours into each week.” The restart provision allows drivers to start a new workweek anytime after taking off 34 hours. The provision effectively increases allowable driving hours in any seven- or eight-day period by 25 to 30 percent, according to the IIHS.

OWNER-OPERATORS—FEWER BUT MIGHTIER: A recent article in Trailer/Body Builders suggests the ranks of owner-operators are diminishing, but the ones with staying power are savvier than ever. “Most drivers recognize that if they want to work, they can go anywhere today and make a living,” says one operations manager for a truckload carrier. “When they're making money and things are going well, they're usually less inclined to switch. But today we're seeing a much greater focus on issues outside of pay and miles.” According to Dale Corum of Mercer Transportation, one of the first ques¬tions independent drivers ask carriers is whether they have a fuel surcharge and whether they pass it on to owner-operators. Corum said his company passes on the entire fuel surcharge to its independent drivers and believes this is one reason turnover at Mercer is a mere 23.1 percent, compared to an industry average of 136 percent for large fleets and 102 percent for small fleets. As far as equipment goes, owner-operators are requesting financing and equipment manage¬ment options. “Owner-operators are looking at maintenance plans, financing options, and especially resale value,” said Todd Acker of Peterbilt Motors Co. “They're taking a much more business-focused approach to their truck purchases.” The president and CEO of Freightliner says there is a trend for fleets to outsource the more specialized transportation tasks to owner-operators. Rainer Schmueckle says, “Shippers as well are looking for smaller, more specialized providers that can handle specific transportation needs. That's putting more emphasis on the owner-operator market.” While some carriers try to lure drivers with new programs like trailer leasing programs, others say it's the tried-and-true that gets them to stick around. “We're looking for business partners—people who will treat us like we treat them,” says Dale Corum.

DON'T LEAVE HOME WITHOUT IT: On January 1, 2008, the Western Hemisphere Travel Initiative goes into effect. That means U.S. citizens will be required to show their passports when returning from Canada, Mexico, and the Caribbean. Truckers, however, will be able to show their Free and Secure Trade (FAST) cards instead. “Our goal is to strengthen border security and expedite entry into the Untied States for U.S. citizens and legitimate foreign visitors,” said a Homeland Security undersecretary. Currently, U.S. citizens can reenter the country by showing their driver's licenses, although some border officials have been requesting additional documents since 9/11. An estimated 20 percent of Americans have passports. Commercial truck drivers could use FAST cards instead of passports, according to the Department of Homeland Security. To obtain a FAST card, drivers must undergo background checks and provide appropriate documents and biometric requirements. Although FAST cards were introduced as a voluntary way for low-risk drivers and fleets to cross U.S. borders, the cards—or a passport—will become required for truckers and others who want to reenter the country.

CONSUMERS CALLING THE HEALTH CARE SHOTS: A recent survey of benefits managers finds that 22 percent of responding companies offer a consumer-driven health plan (CDHP) option to employees, with 74 percent of companies offering CDHPs within the last year. CDHPs—typically based on a health reimbursement arrangement or on the new health savings accounts—are intended to get consumers to curb discretionary spending and unnecessary doctor visits. One of the researchers said, “We may be looking at the tipping point for consumer-driven health plans being embraced by U.S. companies. To date, 2005 CDHP plan starts have exceeded 2004's record benchmark, and our survey reveals the trend will only continue.” Of the employers not offering a CDHP, 50 percent said they plan to offer one in the future; the other 50 percent said the concept is too new and they will wait to see how other employers fare before making a decision. A majority of respondents (55 percent) say that CDHP options make employees better health care consumers, while only 8 percent said they have no effect. But 22 percent are concerned that CDHP options encourage employees to skip necessary health care in order to save money. Either way, the authors of the study believe the results point to increased popularity of CDHP options, as employers look for ways to save on health care costs.

THE HAPPIEST PEOPLE ON EARTH: Who would have guessed? A third-world nation plagued by poverty, disease, and political unrest was declared the nation with the happiest people on earth. A study of more than 65 countries by New Scientist magazine finds that Nigeria tops the list as the happiest country, followed by Mexico, Venezuela, El Salvador, and Puerto Rico. The bottom three nations, in terms of happiness levels, were Russia, Armenia, and Romania. Factors that make people happy vary from country to country. In the United States, which ranked 16th, personal success and self-expression are seen as the most important factors for determining happiness, while in Japan, fulfilling family and societal expectations is highly valued. The researchers described the quest for material goods as “a happiness suppressant.” They say that happiness levels have remained nearly the same in industrialized countries since World War II, even though income has risen considerably. So what is it about Nigerians that makes them so unusually happy? “We Nigerians look after each other,” says one woman. “If I know you and you are hungry or ill I will try to help.” Her friend offers an explanation too: You see (our happiness) in how we move. It's a movement inside us and in society. We feel full of music and love of God.” The survey, completed in 2003, and conducted about every four years, is a worldwide investigation of socio-cultural and political change. It includes questions about how happy people are and how satisfied they are with their lives.

The best thing to do with a red hot idea is build a fire under it.